No doubt, cryptocurrency trading opens a door of financial opportunities to people who are looking for ways to make passive income. However, just like with every other business format, there are risks involved, and there are ways to minimize those risks or get drowned by them. This is the first part of three articles about the common mistakes that new traders make in cryptocurrency trading and how to avoid them.
3 Mistakes to Avoid in Cryptocurrency Trading
1. Not Researching and Depending on Shills
Following trade signals from telegram groups and industry influencers is a good way to know what’s happening in the market. However, when it comes to cryptocurrency trading, nothing beats doing your research. Most people on social media promote coins for personal gains. If you buy solely on the information you read, you may lose your capital. You need to do your research so you can understand the power of the coin, its price changes and development stage. Don’t run into the market blindly.
2. Not Understanding the Fundamentals of Charting
Traders often think technical analysis or charts are overrated or too complicated. But whether you like it or not, charting is important. Learning how the market moves and what the coin patterns are is a good way to stay aloft. Something that appears insignificant can contribute to your trade success. Learn as much as you can about resistant zones trend lines, price ranges, etc.
3. Panicking Into Selling and Buying
Fear controls most new traders. When a coin in the volatile market starts going down, they sell off in fear. When the price begins to rise, they start buying again. Don’t let panic rule your trading choices. The approach doesn’t save you money because each time you sell off during a price fall, you’ll lose money. Most coins bounce back days after you cut your losses.
These are the first three of the nine most common mistakes new traders make.